Monday, July 29, 2002		Guest Speak

Translate jargon to growth
Yash Nagpal

Yash Nagpal Managing Director Navision India

IT solution providers seem to be falling into the trap of quirky terminology. ERP, ERM, BPR, SCM, CRM … let’s cut through the jargon. Acronyms only confuse the customer and give an uncomfortable feeling of being conned.

Rather than support investment in IT just because "everybody is doing it," lets answer the core question: what’s in it for you? How can an Enterprise Resource Planning (ERP) package transcend jargon and translate into a real business growth?

A quick look around at why organisations are investing in enterprise business solutions reveals that the overriding benefit being derived from this investment is "integration" of diverse business process to simplify operations for faster decision-making.

Analysts at IDC pointed out recently that there are four key drivers propelling the movement towards enterprise resource planning. ‘Corporate growth’ is the most compelling driver. The study concluded that CEOs and other top management personnel have realized that if the organisation has to survive and grow then enterprise resource planning is an effective tool that can provide faster information and cut costs to increase efficiency.

Other powerful reasons included ‘improved customer service,’ ‘efficient distribution system’ and ‘reduced operational expenses.’

The view of enterprise resource planning from small and medium enterprises is somewhat different. Among the main benefits that SME organisations are beginning to see are: Improvement in financial processes and management, enabling more effective management of operations and optimal management of resources.

As an insider in the enterprise solutions industry, I believe that the overriding benefit of our package is ‘one solution to run organisations’.

Sure, there are no sledgehammers to profits and there are dangers attached to bespoke packages. If you have to change the organisation to fit into the package, you have a problem. Despite the general impression of inflexibility of enterprise solutions, changes are possible.

Just as when foreign car manufacturers came into India, they adapted their cars to suit the Indian market. Best in breed enterprise solutions too are those that will mould the package to adapt to the market, those that will provide source codes to solution centres to give customers the flexibility to mould solutions to their organisations rather than the other way around.

It is with a lump in our throat that we are sometimes compelled to refer to our offering as an ERP package. There is only one reason for it: the market is still not familiar with the more appropriate term, enterprise business solution. However, from the perspective of customer benefit, we offer a complete business solution.

Awareness of the benefits an enterprise business solution could provide - irrespective of the scale of business - is the critical bridge that was missing between IT and SME enterprises. Until now, IT had seemed to be the preserve of the large and multinational companies. Smaller companies were hesitant to make a substantial investment. Unlike the international average IT investment of 2-3 per cent of revenue, an average Rs 30 crore company in India was likely to invest no more than 5 to 7 lakh. Needless to say, this was shortsighted. It read: what’s good enough for the west is not good enough for us.

Today, however, circumstances are changing. With declining trade barriers and emerging competition from the neighbourhood – China, Russia, even Pakistan and Afghanistan – companies are searching for that critical competitive edge.

Even traditionally family-run businesses are bringing in professional management and executives who realise the benefit of IT. These crusaders in the SME segment are working hard at bringing transparency into the hidden preserves of cash flow and book-keeping. In the changing scenario today, it makes a lot more sense to lay emphasis on transparent accountability in accounting.

This needs a culture shift, a complete transformation in attitude. Yet real life benefits emerging from real companies are facilitating this shift faster than we think.